Case Number: ITA 1599/DEL/2019
Appellant: Maharishi Markandeshwar University Trust, Ambala Cantt
Respondent: Pr.CIT, Central, Gurgaon
Assessment Year: 2014-15
Result: 2014-15
Case Filed On: 2019-02-27
Order Type: Final Tribunal Order
Date of Order: 2019-08-19
Pronounced On: 2019-08-19
Court: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘G’, NEW DELHI
Judges: Sh. H. S. Sidhu, Judicial Member and Dr. B. R. R. Kumar, Accountant Member
The case involves the appellant, Maharishi Markandeshwar University Trust, based in Ambala Cantt, challenging the revisionary powers exercised by the Principal Commissioner of Income Tax (Pr.CIT), Central Gurgaon. The assessment year under scrutiny is 2014-15.
The appellant raised several grounds of appeal against the order of the Pr.CIT. The primary contention was that the Pr.CIT had erred on facts and in law in exercising revisionary powers under section 263 of the Income Tax Act without satisfying the twin conditions of the assessment order being erroneous and prejudicial to the interests of the Revenue.
The appellant argued that the Pr.CIT’s allegations were based on suspicions, surmises, and conjectures without conducting any independent inquiry. The specific grounds of appeal included:
The Pr.CIT’s order highlighted several issues, including:
The Tribunal examined the details pertaining to the NRI quota admissions and found that the guidelines of the MCI and the Haryana Government notification were not violated as alleged. The assessee had provided complete details, including Foreign Inward Remittance Certificates (FIRC) and affidavits of parents and students. The Tribunal noted that there was no adverse finding by any regulatory authority regarding these admissions.
The Pr.CIT had alleged that vehicles were purchased in the name of trustees but were used for personal purposes, constituting a violation of section 13 of the Income Tax Act. The Tribunal found that the vehicles were indeed used for the purposes of the trust and that the reimbursement of loan EMIs to trustees was justified. The records showed that the vehicles were included in the block of fixed assets of the trust, and depreciation was claimed accordingly.
The Pr.CIT’s order questioned the genuineness of salaries paid to teachers, alleging that some of them were ghost employees. The Tribunal reviewed the evidence, including statements recorded during the search, affidavits, and salary certificates. It found that the teachers were indeed employed by the trust, and their services were rendered as claimed. The Tribunal emphasized that the absence of driving licenses or practice locations of doctors did not constitute evidence of bogus salary payments.
The Tribunal examined the allegations regarding other benefits taken by trustees, such as services provided by employees of the trust at their residences. The Tribunal found that the payments to certain employees were made personally by the trustees and not by the trust. It concluded that there was no violation of the provisions of the Income Tax Act in this regard.
The Tribunal concluded that the Pr.CIT had erred in invoking revisionary powers under section 263 of the Income Tax Act. It held that the assessment order was neither erroneous nor prejudicial to the interests of the Revenue. The allegations made by the Pr.CIT were based on inadequate evidence and misinterpretation of facts. Therefore, the Tribunal set aside the order of the Pr.CIT, allowing the appeal filed by Maharishi Markandeshwar University Trust.
This case highlights the importance of thorough and evidence-based inquiries in tax assessments and the need for adherence to principles of natural justice in exercising revisionary powers.
Case ITA 1599/DEL/2019: Maharishi Markandeshwar University Trust vs Pr.CIT, Central Gurgaon
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